Dear Danielle: Client Wants Me to Cut My Fees By $200 a Month

Dear Danielle: Client Wants Me to Cut My Fees by $200 a Month

Dear Danielle:

I recently had a contract client who could no longer afford to pay me the regular contracted amount because of a slowdown in her business so she asked that I drop my price about $200 until she was back on her feet. How should I deal with that? She’s been my client for 3 years and she’s always paid on time and every penny. I agreed to the cut but not sure for how long. Any words of advice? —KP

It sounds like this is a good client with whom you’ve had a happy, healthy business relationship thus far.

It also sounds like this client is paying some sort of monthly fee, if I am surmising things correctly.

And there’s no reason to throw all that away.

BUT there’s also no reason why this client’s financial woes should be your problem. Especially since you aren’t sure how long it will continue.

There IS a compassionate, client-centric way you can offer to help this client out during what I assume is only a temporary predicament without sacrificing your own business needs and well-being.

And it starts with this handy phrase: You don’t get what you don’t pay for.

That’s obviously not very client-centric the way it’s phrased, but the solution in its meaning is, very simply, to take something off the table.

What that means is, if you are selling hours, take $200 worth of hours away from their retainer. Only work up to the number of hours they have paid for.

If they can only pay for 15 hours instead of the usual 20, then they should only get 15 hours of support, not 20.

Alternatively, if you are using my value-based pricing methodology (which is a faster, more effective way to make an impact and give clients more readily apparent, targeted results), take a $200 task/function/role away from the monthly support plan.

Have a conversation with the client, identify what the most important functions are to their operations during this financial lean-time, and then offer to remove/temporarily suspend a $200 value task/function/role that is least necessary and will have the least impact on their continued smooth functioning and profits.

Give them two or three options of what could be removed for $200 less a month, and let them decide which one to sacrifice.

It’s also possible during this discussion that the client realizes even more the value of what you do for their business and decides to find the money to keep paying your full fee for full services to continue.

If this were me, I would also be curious about the reasons for this client’s financial down-turn.

If they were open to sharing, it’s possible I would have some ideas and insights on what we could do and where we could focus our work to create some new/fresh revenue.

Perhaps you even saw this coming, but the client had previously been resistant to exploring your ideas, trying something new, or doing things a little differently than they were used to that might have helped them improve financially. They might now be a bit more receptive to hearing you out.

I would, however, certainly expect to be paid for any additional work/consulting I provided. It’s up to them to decide where their priorities are.

No reasonable client would expect you to work for free.

And despite any client’s best (or unrealistic) intentions, they don’t have a crystal ball no matter what grand promises they make.

So the best policy is to go about things in a way that serves your business interests.

Keep in mind that you have an obligation to safeguard your financial well-being and business profitability not only for yourself, but for your other clients as well.

It doesn’t serve them for you to be giving away time, energy, and work for free to someone who isn’t paying fully for it.

And don’t even think about letting this client pay on credit (a la “I will gladly pay you tomorrow for a hamburger today”).

You won’t be doing them, yourself, or your other clients any favors by letting them go into debt to you.

If they are already in financial straights, owing you or anybody else more money is only going to bury them further.

Remember, you teach people how to treat, value, and respect you.

Lower your fee for this client if you want to help and keep them on your roster; just make sure you also take away an equal amount of work from what you provide them with.

And have another conversation with this client to reset the expectations around what they will and won’t get for the reduced monthly fee.

I also suggest giving the client a definite time limit on this special arrangement.

Give it a month or two and inform the client that you will need to review and discuss things again at that time to determine whether or not it’s still feasible/profitable/in your business interests to continue the arrangement.

If there’s no improvement in sight, you may even decide that, while you wish this client well, keeping them on your roster is no longer profitable for you.

If any of this is helpful, one way you could return the favor is by letting me know in the comments. I would truly value that.

And if you or anyone else has more questions on this, please feel free to ask in the comments, and I’ll be happy to continue the conversation and share my further insights and advice.

4 Responses

  1. Insightful. Concise. I think that the biggest thing to grasp is in moving away from the traditional by-the-hour to a value-proposed/value-based system. I have taken a look at all of my clients and the workload and in using your system (and calculator) I realize that I have been charging more than half lower than I should be. I like that instead of saying, no, I won’t lower my price that it’s brought back to the services you provide to the client, not the time. However, your time is worth a lot and so is what you contribute to their business.

  2. That’s great to hear, LaToya. 🙂 Our industry is particularly conditioned to automatically think they are the ones who need to adjust things at their end (i.e., reduce their rates, give discounts, give away valuable work/service for free) instead of having the client make the adjustments. A lot of this is due to the bad/old advice they get when they first enter the industry. I’ve made it my mission to challenge that thinking and miseducation.

  3. Danielle,

    That is such an exceptional response, very direct and informative. I wish I had of seen this a couple years ago. I made the mistake of lowering prices to compensate for a couple of clients, and it hurt more than it helped. I lost a lot of valuable time and money investing into businesses due to my ignorance of such, and my large heart and willingness to help. If anything, I adapted the aforementioned attitude, changed up my contracts, and have not done it again since.

    Danielle, thank you so very much for your wisdom and willingness to share with us.

  4. Hi Chaunte 🙂

    We’ve all done it, myself included. I think many others would chime in and express the same experience: underpricing/undervaluing themselves and their services cost them a lot (and not just in terms of income/revenue). The great news is that every day is a fresh opportunity to course correct and improve our businesses for ourselves and for our clients. Because business isn’t business unless everyone is getting what they need. I’m so glad to hear you’ve improved things in your business. We deserve every bit as much self-care and self-interest as we give our clients’ businesses.

    Thanks for sharing! It’s such an encouragement to others to stop neglecting their own needs and interests in business. It’s so much happier and fulfilling helping clients once you do, wouldn’t you agree?

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